2. Anne's preference can be represented by the following utility function: U(x, y) = xPy". a) Find the optimal bundle for Anne that minimizes her expenditure. b) Write down the expenditure function....

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Extracted text: 2. Anne's preference can be represented by the following utility function: U(x, y) = xPy". a) Find the optimal bundle for Anne that minimizes her expenditure. b) Write down the expenditure function. c) In a graph, show how her optimal bundle would change if the price of x increases (assume price of y remains the same).